Alzheimer’s disease (AD) is a neurodegenerative disorder characterized by the accumulation of amyloid plaques and neurofibrillary tangles in the brain. The major component of the plaques, amyloid β peptide (Aβ), is generated from amyloid precursor protein (APP) by β-and γ-secretase-mediated cleavage. Because β-secretase/beta-site APP cleaving enzyme 1 (BACE1) knockout mice produce much less Aβ and grow normally, a β-secretase inhibitor is thought to be one of the most attractive targets for the development of therapeutic interventions for AD without apparent side-effects. This study reports the in vivo inhibitory effects of a novel β-secretase inhibitor, KMI-429, a transition-state mimic, which effectively inhibits β-secretase activity in cultured cells in a dose dependent manner. KMI-429 was injected into the hippocampus of APP transgenic mice. KMI-429 significantly reduced Aβ production in vivo in the soluble fraction compared with vehicle, but the level of Aβ in the insoluble fraction was unaffected. In contrast, an intrahippocampal injection of KMI-429 in wildtype mice remarkably reduced Aβ production in both the soluble and insoluble fractions. These results indicate that the β-secretase inhibitor KMI-429 is a promising candidate for the treatment of AD.